Credit Card Cash Withdrawal

There is a credit card cash withdrawal limit on every card beyond which you cannot withdraw cash via an ATM or bank. Out of your total available credit limit, you are assigned a cash withdrawal limit ranging from 20% to 40%. A credit limit is the maximum amount limit you can spend using a credit card whereas a cash advance or withdrawal limit is the maximum money you can withdraw using your credit card. You can contact the customer care team of your card issuer to know what is cash limit in credit card.

Here are some of the pros and cons of the credit card cash withdrawal facility you must consider before swiping your credit card at the nearest ATM:

Generally, withdrawing cash using your credit card is discouraged by credit card providers since you are borrowing hard cash. To prevent misuse of this facility, the card issuers levy certain fees and charges on credit card cash advances. 

A card issuer charges a cash advance fee for every transaction you make using your credit card. Typically, most credit card providers charge either a certain percentage of the cash advance or a fixed fee. Top banks in India usually charge about 2.5% of the transaction amount as a cash advance fee, subject to a minimum of Rs. 250 to Rs. 500. 

Here's a list of cash advance fees charged for some popular credit cards:

Credit card cash withdrawals involve interest as they are not eligible for the interest-free period. Finance charges or credit card interest rates will be applicable on cash transactions from the first day. These charges are quite high and can range from 2.5% to 3.9% per month. The interest is compounded on a daily basis, which means that the longer your cash advance remains unpaid the more interest will be accumulated. Hence, it is advised not to opt for cash withdrawals on credit cards and, even if you do so, try to pay back the amount as early as you can.

Following are the interest charges applicable on credit card cash advance facility on top credit cards in India:

If you are confused about how to withdraw money from credit card, don’t worry. Withdrawing cash using a credit card is easy. You just need to follow the same process as you would do withdrawing cash from a debit card. Visit your nearest ATM and insert your credit card into ATM machine to withdraw the required cash anytime. You can withdraw cash with a credit card from any bank’s ATM. However, certain banks may levy separate credit card ATM withdrawal charges for withdrawing cash from other banks’ ATMs. If you still have any queries, you can ask your credit card provider’s customer care team about how to withdraw cash from credit card.

Credit card cash withdrawals are not reported separately by the card issuers to the credit bureaus. Only the total outstanding amount due along with other defaults will be reported to the credit agencies. Withdrawing cash from credit cards does not have a direct effect on your credit score. However, if you could not pay even the minimum amount due (MAD) on your credit card within the period prescribed by the issuer, your credit score is impacted. Make sure you keep track of all the outstanding balances and clear the payment on time to keep your credit score stable.